“continuous supply of goods” :
(32) “continuous supply of goods” means a supply of goods which is provided, or agreed to be provided, continuously or on recurrent basis, under a contract, whether or not by means of a wire, cable, pipeline or other conduit, and for which the supplier invoices the recipient on a regular or periodic basis and includes supply of such goods as the Government may, subject to such conditions, as it may, by notification, specify;
In the definition “provided” may be read as supplied.
It refers to supply of goods continuously or on recurrent basis under a contract, with periodic payment obligations.
The following aspects need to be noted:
It should be a contract for supply on a recurrent basis and cannot be a one-time supply contract;
The contract should be a case of periodic billing and periodic payments – viz., the billing and receipts thereto should be on a periodic basis (e.g.: every fortnight; every Monday etc.) and not one-time. Further, the contract should specify this periodicity/ frequency of billing/ payment;
The mode of supply would not be relevant – viz., such supply may be through a wire, cable, pipeline or other conduit or any other mode;
The Government is empowered to notify certain supplies as continuous supply of goods.
Examples of continuous supply of goods are:
(a) Open purchase orders with daily delivery schedule (Just In Time- JIT) and understanding of fortnightly billing;
(b) VMI (vendor managed inventory) where the agreed periodicity for billing is, say, monthly/ fortnightly etc.;
(c) Supply of gases through pipeline with a weekly billing schedule;
(d) Supply of say, 5 litre water cans on an as and when required basis with a frequency of monthly billing under a contract.